Vietnam's labor ministry still dithering over raising retirement age

With the pension fund running dry, people may have to work for longer.

The retirement age in Vietnam, currently 60 for men and 55 for women, may be gradually raised to 62 and 60 respectively, the labor ministry said in a new proposal.

It suggested a step-by-step approach by adding six months to the current retirement age every year starting from 2021.

The proposal has been submitted for public feedback over the next two months.

The labor ministry compiled its first suggestions on the issue in December last year, when it said the government should either keep the retirement age at 60 for men and 55 for women as currently, or lift it to 62 for men and 58 for women.

People with limited work capacity and those who do physically demanding and dangerous jobs may retire earlier than suggested, while those with professional qualifications and management skills may retire at a later age, provided that it does not exceed the suggested age by more than five years, the ministry said in the latest proposal.

Vietnam reached a turning point in 2015 when it started to become one of the countries with the fastest aging populations in the world, the ministry said in a report in March last year.

The number of Vietnamese who are over 65 will rise from 6.3 million now to 18 million by 2040, accounting for more than 18 percent of the population and transforming Vietnam from a young society into an old one, the report quoted the United Nations a saying.

If the current retirement age remains unchanged, the country’s social insurance fund may fall short by 2020 and would be exhausted by 2037, the Vietnam Social Insurance predicted.

According to the United Nations Development Program, if Vietnam fails to create jobs, develop social security and improve quality of life before the working age population peaks, it will risk instability in the future, including a lack of workers and an increased need for health care for the elderly.

In the near term, the UNDP suggests Vietnam should boost productivity by raising the mandatory retirement age, which means there will be more working seniors in the future.

Asia-Pacific countries are home to more than half of the world's 60+ year-olds, numbering up to 533 million people, said Lubna Baqi, the deputy director for the Asia and the Pacific Regional Office of the United Nations Population Fund.

The number of older people in the region is expected to jump to nearly 2.5 billion by 2050, representing two thirds of the world’s population aged over 60.

Asia's population is aging faster than anywhere esle in the world, said a study, warning the swelling ranks of the elderly will cost the region $20 trillion in healthcare by 2030.